In the past, banks exchanged paper instruments in the settlement of checks. The Check Clearing for the 21st Century Act (Check 21) was signed into law on Oct. 28, 2003, and became effective on Oct. 28, 2004. Check 21 is designed to foster innovation in the payments system and to enhance its efficiency by reducing some of the legal impediments to check truncation. Check truncation is the settlement of a check without physically delivering the original instrument. The law facilitates check truncation by permitting the use of a new negotiable instrument called a substitute check, also referred to as an image replacement document (IRD), which permits banks to truncate original checks, to process check information electronically, and to print and deliver substitute checks to banks that want to continue receiving paper checks rather than electronic check information and/or images. A substitute check is the legal equivalent of the original check and includes all the information contained on the original check.